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Canada’s main stock index opened little changed on Thursday, after rising every day so far this week, as shares of precious metal miners slipped and investors awaited signs of further progress in U.S.-China trade talks.
At 9:30 a.m. ET, the Toronto Stock Exchange’s S&P/TSX Composite Index was up 6.52 points, or 0.04 per cent, at 16,286.38.
Health care stocks were the biggest gainers, up 0.7 per cent Aphria up 1.7 per cent, Hexo Corp. up 1.3 per cent and Cronos Group up 1.3 per cent.
Utilities were up 0.3 per cent, consumer discretionary stocks rose 0.3 per cent and consumer staples were up 0.25 per cent.
U.S. stocks opened flat on Thursday following a recent run of gains, as lack of fresh developments on trade talks with China and worries about global economic growth kept risk appetite in check.
The Dow Jones Industrial Average fell 4.71 points, or 0.02 per cent, at the open to 26,213.42.
The S&P 500 opened higher by 0.59 points, or 0.02 per cent, at 2,873.99. The Nasdaq Composite dropped 1.30 points, or 0.02 per cent, to 7,894.26 at the opening bell.
Negotiations continued in Washington on Wednesday after meetings last week in Beijing, as the United States and China worked toward resolving their long-standing trade dispute which has cast a shadow over global economic growth.
U.S. President Donald Trump is set to meet Vice Premier Liu He, who is leading the Chinese side in the talks later on Thursday.
“Things are pretty quiet and there has been a real lack of news, and really it’s been a mixed bag as far as what we’ve been seeing from economic data this week,” said Sahak Manuelian, managing director, equities trading at Wedbush Securities in Los Angeles.
Germany’s industrial orders in February fell at their sharpest rate in more than two years and 2019 growth forecasts were slashed by more than half by leading economic institutes in Europe’s biggest economy.
U.S. data on Wednesday showed services sector activity hit a more than 19-month low in March and private payrolls grew less than expected. Investors will get a clearer picture when the Labor Department releases the non-farm payrolls report on Friday.
Hopes that the United States and China will strike a deal have driven the S&P 500 to a strong first-quarter performance and it has closed higher all of this week. The index is near its highest level since Oct. 10 and is less than 2 per cent away from hitting an all-time high.
“Technically the market is starting to get stronger. We’re starting to break out of the near-term resistance level and look back towards the highs from last year,” Manuelian added.
Stocks closed higher on Wednesday as chipmakers rallied on trade hopes and bullish reports about revival of chip demand, taking the Philadelphia Semiconductor index to a record high.
Micron Technology Inc, after closing up more than 3 per cent on Wednesday, fell 1.7 per cent after Morgan Stanley downgraded the chipmaker’s stock to “underweight” from “equal-weight.”
Tesla Inc dropped nearly 9 per cent after the electric carmaker’s deliveries fell 31 per cent in the first quarter on challenges in shipping to Europe and China.
In addition, lawyers for Tesla CEO Elon Musk will argue on Thursday that he did not violate a fraud settlement with the U.S. Securities and Exchange Commission and should not be held in contempt, the latest twist in a high-profile battle between the billionaire and the government.
Overseas, data from Germany showed industrial orders fell at their sharpest rate in more than two years in February, driven largely by a slump in foreign demand.
It compounded signs that Europe’s largest economy has had a feeble start to the year and left the euro stuck at $1.12 and sent German Bund yields back below zero in the bond market.
Germany’s DAX was up 0.4 per cent, Britain’s FTSE fell 0.3 per cent and France’s CAC was off 0.2 per cent.
MSCI’s broadest index of Asia shares also lost 0.4 percent overnight after five straight days of gains had taken it to the highest level since late August.
Chinese shares were firmer with the blue-chip index up 0.6 per cent while Japan’s Nikkei paused near a recent one-month top and closed up 0.05 per cent.
Commodities
Oil prices fell for a second day on Thursday, with Brent briefly edging below US$69 per barrel because of rising inventories and production in the United States, but losses were limited as supply tightened elsewhere.
Brent futures were down 28 cents at US$69.03. Brent fell 6 cents on Wednesday, after touching US$69.96 – the highest since Nov. 12, when it last traded above US$70.
U.S. West Texas Intermediate (WTI) crude fell 18 cents to US$62.28 a barrel. The contract dropped 12 cents in the previous session after hitting US$62.99, also the highest since November.
Crude oil inventories in the United States rose by 7.2 million barrels last week. Analysts had forecast a decrease. U.S. crude production climbed by 100,000 barrels per day to a record 12.2 million bpd, government data showed.
Global benchmark Brent has gained nearly 30 per cent this year, while WTI has risen nearly 40 per cent. Prices have been underpinned by U.S. sanctions on Iranian and Venezuelan crude, OPEC production cuts and rising global demand.
“There is a clear bias to the upside with the supply restrictions,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“And there’s a much-better-than-expected demand picture after the recent China and U.S. PMI numbers, along with a potential kicker from any U.S.-China trade agreement,” he said.
Gold inched higher on Thursday as stock markets retreated from multi-month highs following weak data from Germany, while investors awaited clarity on the progress of U.S.-China trade talks.
Platinum jumped more than 1 per cent to its highest since mid-June last year at US$887.59 per ounce.
Spot gold had risen 0.1 per cent to US$1,291.37 per ounce. U.S. gold futures were unchanged at US$1,295.70 an ounce.
“The German industrial data is the main market driver this morning,” said ActivTrades chief analyst Carlo Alberto De Casa, adding that falling equity markets were supporting gold.
“The whole of Europe is suffering and in the United States, a lot of people are talking about the possibility of bringing down interest rates again because they have been hiking rates too quickly,” said Afshin Nabavi, MKS SA senior vice-president.
“So eventually if that happens, it will be really positive for the precious metals.”
Currencies and bonds
The Canadian dollar was down slightly, trading near 74.8 US cents investors turned cautious on the loonie ahead of Canadian jobs data due on Friday.
“Support is at $1.3297 (75.2 cents US) and resistance at $1.3375 ($74.76 cents US),” said Adam Cole, chief currency strategist with RBC Europe Ltd. in a note.
Blockbuster Canadian job gains this year have helped bolster investor sentiment for the loonie, offsetting other data showing a slowdown in Canada’s economy.
The domestic job numbers have been volatile in recent months so now investors are bracing for disappointing data that could put “downward pressure” on the currency, said Alfonso Esparza, a senior currency analyst at OANDA.
In the foreign exchange market, moves were modest after bigger swings overnight when all major currencies gained against the safe-haven yen.
The greenback was a tad lower against a basket of currencies at 97.06 in Europe although it nudged up against the yen.
The euro barely budged at $1.1237 waiting for the minutes of the European Central Bank’s last meeting, when it pushed back rate hike expectations.
Sterling gained 0.2 per cent to $1.3180 after British Prime Minister Theresa May held talks with the opposition Labour Party in a bid to break the Brexit deadlock that may lead to a softer departure deal from the EU.
The lower house of Britain’s parliament late on Wednesday also narrowly passed legislation which would force May to seek a delay to Brexit in order to prevent Britain leaving without a deal on April 12.
Stocks to watch
Constellation Brands Inc. on Thursday reported quarterly sales and profit well above analysts’ estimates, as the brewer sold more of its popular Corona and Modelo beers, sending its shares up about 3 per cent in premarket trading. The company also announced Wednesday that it would sell about 30 of its wine and spirit brands that retail under US$11 a bottle to California-based E. & J. Gallo Winery for US$1.7-billion, as the brewer focuses on its portfolio of premium brands such as Robert Mondavi, Meiomi and Kim Crawford.
Facebook was upgraded to “buy” from “neutral" at Guggenheim. Its shares rose 1.3 per cent in premarket trading.
Micron Technology Inc. after closing up more than 3 per cent on Wednesday, fell 3.3 per cent in premarket trading after Morgan Stanley downgraded the chipmaker’s stock to “underweight” from “equal-weight.”
Shares of Boeing were up 0.5 per cent in premarket trading after newly released summaries of a preliminary investigation into the Boeing Max 8 Ethiopian Airlines crash that killed 157 people last month said that despite following all of Boeing’s recommended procedures, Ethiopian Airlines pilots were unable to prevent the “persistence” of “nose diving” by the Boeing Max 8.
Credit rating agency Moody’s Investors Service downgraded TransCanada Corp. over concerns about the pipeline company’s debt burden and some uncertainty about its capital spending program.
Walmart upgraded its baby registry, and adding new baby products, as a way to woo new parents.
Earnings include: Constellation Brands Inc.; Northern Dynasty Minerals Ltd.; Richelieu Hardware Ltd.; Uranium Participation Corp.
Economic news
(8:30 a.m. ET) U.S. initial jobless claims for week of March 30. Estimate is 216,000, up 5,000 from the previous week.
(10 a.m. ET) Canada's Ivey PMI for March.
(10 a.m. ET) U.S. Conference Board CEO Confidence Index for Q1.
With files from Reuters